IRVINE, CALIF. – Before the sun rose, the informant donned a white Islamic robe. A tiny camera was sewn into a button, and a microphone was buried in a device attached to his keys.

â€œThis is Farouk al-Aziz, code name Oracle,â€ he said into the keys as he sat in his parked car in this quiet community south of Los Angeles. â€œItâ€™s November 13th, 4:30 a.m. And weâ€™re hot.â€

The undercover FBI informant – a convicted forger named Craig Monteilh – then drove off for 5 a.m. prayers at the Islamic Center of Irvine, where he says he spied on dozens of worshipers in a quest for potential terrorists.

Since the 2001 terrorist attacks, the FBI has used informants successfully as one of many tactics to prevent another strike in the United States. Agency officials say they are careful not to violate civil liberties and do not target Muslims.

But the FBIâ€™s approach has come under fire from some Muslims, criticism that surfaced again late last month after agents arrested an Oregon man they said tried to detonate a bomb at a Christmas tree-lighting ceremony. FBI technicians had supplied the device.

In the Irvine case, Monteilhâ€™s mission as an informant backfired. Muslims were so alarmed by his talk of violent jihad that they obtained a restraining order against him.

He had helped build a terrorism-related case against a mosque member, but that also collapsed. The Justice Department recently took the extraordinary step of dropping charges against the worshiper, who Monteilh had caught on tape agreeing to blow up buildings, law enforcement officials said. Prosecutors had portrayed the man as a dire threat.

Compounding the damage, Monteilh has gone public, revealing secret FBI methods and charging that his â€œhandlersâ€ trained him to entrap Muslims as he infiltrated their mosques, homes and businesses. He is now suing the FBI.

Officials declined to comment on specific details of Monteilhâ€™s tale but confirm that he was a paid FBI informant. Court records and interviews corroborate not only that Monteilh worked for the FBI – he says he made $177,000, tax-free, in 15 months – but that he provided vital information on a number of cases.

Some Muslims in Southern California and nationally say the cascading revelations have seriously damaged their relationship with the FBI, a partnership that both sides agree is critical to preventing attacks and homegrown terrorism.

Citing Monteilhâ€™s actions and what they call a pattern of FBI surveillance, many leading national Muslim organizations have virtually suspended contact with the bureau.

â€œThe community feels betrayed,â€ said Shakeel Syed, executive director of the Islamic Shura Council of Southern California, an umbrella group of more than 75 mosques.

â€œThey got a guy, a bona fide criminal, and obviously trained him and sent him to infiltrate mosques,â€ Syed said. â€œAnd when things went sour, they ditched him and he got mad. Itâ€™s like a soap opera, for Godâ€™s sake.â€

FBI and Justice Department officials say that the Monteilh case is not representative of their relations with the Muslim community and that they continue to work closely with Muslims in investigating violence and other hate crimes against them. Officials also credit U.S. Muslims with reporting critical information in a variety of counterterrorism cases.

The bureau â€œrelies on the support, cooperation and trust of the communities it serves and protects,â€ FBI spokesman Michael Kortan said, adding that agents conduct investigations â€œunder well-defined investigative guidelines and the law, and in close coordination with the Department of Justice.â€

Officials said they have gone to great lengths to maintain good relationships with Muslims, including meetings hosted by Attorney General Eric H. Holder Jr. Last week, FBI officials met to discuss law enforcement and other issues with predominantly Muslim Somali community members in San Diego and Minneapolis.

Steven Martinez, assistant director in charge of the FBIâ€™s Los Angeles field office, declined to comment on Monteilh, citing Monteilhâ€™s lawsuit. He said that in certain circumstances, if there is evidence of a crime, FBI agents may â€œconduct an activity that might somehow involve surveillance in and about a mosque.â€

But he said the agency does not target people based on religion or ethnicity.

â€œI know thereâ€™s a lot of suspicion that thatâ€™s the focus, that weâ€™re looking at the mosques, monitoring who is coming and going. Thatâ€™s just not the case,â€ he said.

The â€˜chameleonâ€™

Monteilhâ€™s career as an informant began in 2003. Like many other informants, he was familiar with the inside of a prison cell. He had just finished a sentence for forging bank notes when local police officers he met at a gym asked him to infiltrate drug gangs and white supremacist groups for a federal-state task force.

â€œIt was very exciting,â€ Monteilh said in an interview with The Washington Post. â€œI had the ability to be a chameleon.â€

Monteilh, who stands over 6 feet tall and weighs 260 pounds, had worked as a prison chaplain before he was incarcerated. Married with three children, the Los Angeles native said that after he became an informant, an FBI agent on the task force sought him out. Law enforcement sources, who spoke on the condition of anonymity because they were not authorized to speak publicly about informants, said Monteilh was promoted from drug and bank robbery cases because his information was reliable and had led to convictions.

In early 2006, Monteilh said, he met with his FBI handler at a Starbucks.

â€œShe asked if I wanted to infiltrate mosques,â€ he said. At a follow-up session at a doughnut shop, he said, his new handler told him that â€œIslam is a threat to our national security.â€ Law enforcement sources said that the FBI trained Monteilh and that he aided an existing investigation. Monteilh, however, said he was ordered to randomly surveil and spy on Muslims to ferret out potential terrorists. Agents, he said, provided his cover: Farouk al-Aziz, a French Syrian in search of his Islamic roots. His code name was â€œOracle.â€

Monteilh said he was instructed to infiltrate mosques throughout Orange and two neighboring counties in Southern California, where the Muslim population of nearly 500,000 is the nationâ€™s largest. He was told to target the Islamic Center of Irvine, he said, because it was near his home.

FBI tactics were already a sensitive issue at the Irvine mosque, a stucco, two-story building that draws as many as 2,000 people for Friday prayers. With tensions rising between law enforcement and Muslims over allegations of FBI surveillance, J. Stephen Tidwell, then head of the FBIâ€™s Los Angeles office, spoke at the mosque in June 2006.

â€œIf weâ€™re going to mosques to come to services, we will tell you,â€ he said, according to a video of his speech. â€œ. . . The FBI will tell you weâ€™re coming for the very reason that we donâ€™t want you to think youâ€™re being monitored. We would come only to learn.â€

Two months later, in August 2006, Monteilh arrived at the same mosque. He had called earlier and met with the imam. That Friday, he took shahada, the Muslim declaration of faith, before hundreds of worshipers.

Worshipers said that in Monteilhâ€™s 10 months at the mosque, he became almost manic in his devotion, attending prayers five times a day and waiting in the parking lot before the 5 a.m. prayer. Monteilh said he was told by the FBI to take notes on who opened the mosque each day.

Worshipers said his Western clothes gave way to an Islamic robe, a white skullcap and sandals, an outfit Monteilh said was chosen by his handlers. As he grew closer to Muslims, he said, the FBI told him to date Muslim women if it gained him intelligence.

Worshipers noticed that Monteilh often left his keys around the mosque, said Hussam Ayloush, executive director of the Los Angeles chapter of the Council on American-Islamic Relations, who speaks often at the mosque.

â€œIt seemed strange to people,â€ Ayloush said.

Inside the car remote on the bundle of keys was a microphone that recorded Muslims at the mosque, in their homes and at a local gym. Monteilh, who told people he was a fitness trainer, used the gym to seek out Muslim men.

â€œWe started hearing that he was saying weird things,â€ said Omar Kurdi, a Loyola Law School student who knew Monteilh from the mosque and gym. â€œHe would walk up to one of my friends and say, â€˜Itâ€™s good that you guys are getting ready for the jihad.â€

Worshipers said Monteilh gravitated to Ahmadullah Sais Niazi, an Afghan-born Arabic-language instructor who was a regular at Friday prayers.

In May 2007, Monteilh said he recorded a conversation about jihad during a car ride with Niazi and another man. Monteilh said he suggested an operation to blow up buildings and Niazi agreed. An FBI agent later cited that and other taped conversations between the two in court as evidence that Niazi was a threat.

A few days later, Ayloush got an anguished phone call from Niazi and the other man in the car.

â€œThey said Farouk had told them he had access to weapons and that they should blow up a mall,â€™â€™ Ayloush recalled. â€œThey were convinced this man was a terrorist.â€

Ayloush reported the FBIâ€™s own informant to the FBI. He said agents interviewed Niazi, who gave them the same account, but the agency took no action against Monteilh.

Still, Monteilhâ€™s mission was collapsing. Members of the mosque told its leaders that they were afraid of Monteilh and that he was â€œtrying to entrap them into a mission,â€ according to Asim Khan, the former mosque president. The mosque went to Orange County Superior Court in June 2007 and obtained a restraining order against Monteilh, court records show.

Soon afterward, Monteilh said FBI agents â€œtold me they wanted to cut me loose.â€ After he vowed to go public, he said, he met with three agents at the Anaheim Hilton, where an FBI supervisor threatened him with arrest.

â€œShe said, â€˜If you reveal your informant status to the media, it will destroy the Muslim communityâ€™s relationship with the FBI forever,â€ Monteilh said.

The FBI declined to comment on Monteilhâ€™s allegation.

At a subsequent meeting, Monteilh said, he signed a non-disclosure agreement in exchange for $25,000 in cash. An FBI letter to Monteilhâ€™s attorney, on file in U.S. District Court in Santa Ana, says Monteilh signed the non-disclosure agreement in October 2007.

But Monteilh was arrested in December 2007 on a grand-theft charge and ended up back in jail for 16 months. In January, he sued the FBI, alleging that the bureau and Irvine police conspired to have him arrested, then allowed his informant status to become known in prison, where he was stabbed.

The FBI and police have denied the allegations, and the lawsuit was dismissed on jurisdictional grounds. But the judge allowed Monteilh to file an amended complaint, with similar allegations, in September. The case is pending.

In the meantime, the case against Niazi unfolded. He was indicted in February 2009 by a federal grand jury on charges of lying about his ties to terrorists on immigration documents. In court, prosecutors said that jihadist materials were found on Niaziâ€™s computer and that he had wired money to an alleged al-Qaeda financier. Prosecutors said he is the brother-in-law of Osama bin Ladenâ€™s security coordinator. Much of the evidence was FBI testimony about Niaziâ€™s recorded conversations with an FBI informant, who sources say was Monteilh.

â€œFrankly, there is no amount of bail or equity in a home that can protect the citizens of this communityâ€ from Niazi, Assistant U.S. Attorney Deirdre Eliot said in arguing for his detention. Within days of Niaziâ€™s indictment, Monteilh revealed his informant status in a series of interviews with Los Angeles area media.

â€œI think the FBI treated me with the utmost treachery,â€ he said in the interview with The Post.

In subsequent months, Monteilh sought out Niaziâ€™s attorneys and told them he was ordered to entrap their client.

A year and a half later, on Sept. 30, prosecutors summarily moved to dismiss the case against Niazi, and a judge agreed. The U.S. attorneyâ€™s office in Los Angeles cited the lack of an overseas witness and â€œevidentiary issues.â€ Sources familiar with the decision said Monteilhâ€™s role – and his potential testimony for the defense – was also a factor.

Niazi declined to comment. His attorney Chase Scolnick said he is â€œvery pleased with the outcome. It is a just result.â€

In recent weeks, Monteilh said, he has been approaching Muslims at a local gym and apologizing for â€œdisrespecting their community and religion.â€ Monteilh, who is now unemployed, says he regrets his role in the Niazi case and was glad when the charges were dropped.

On a recent Friday, more than 200 men sat on the carpet for prayers inside the Irvine mosque, most of them in khakis or jeans. During the sermon, the imam offered some advice. â€œIf an FBI agent comes in and says, â€˜Youâ€™re under arrest,â€ he told the crowd, they should pray to Allah – and then call a lawyer.

As worshipers milled around outside, they said they support the FBIâ€™s role in fighting terrorism but feel betrayed by the infiltration of their sacred place. â€œThe FBI wants to treat the Muslim community as a partner while investigating us behind our backs,â€™â€™ said Kurdi, the Loyola student. â€œThey canâ€™t have it both ways.â€ Staff researcher Julie Tate contributed to this report.